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Hedge

2018/1/2 17:44:17 EMR FX Edit
Hedging allows a trader to hold a buying and selling position of the same currency pair at the same time, although hedging may reduce or limit future losses, but it is not guaranteed to avoid any further losses in the account under any circumstances. …

Hedging allows a trader to hold a buying and selling position of the same currency pair at the same time, although hedging may reduce or limit future losses, but it is not guaranteed to avoid any further losses in the account under any circumstances. In the forex market, traders can be completely hedged over the number, not the price. This is due to the difference between buying and selling price (or selling spreads). A trader needs to deposit a margin on one of the direction of the hedging position (the direction in which the number of positions is larger). Margin requirements can often be monitored in the Summary quotation window. Traders may find hedging useful, but should be aware of the following factors that may affect the hedging position.

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